Qualcomm Reports 15% Profit Jump

Wireless technology company Qualcomm Inc. said Wednesday that fiscal third-quarter profit unexpectedly rose 15% on surging demand for high-priced handsets.

Net income increased to $560 million, or 33 cents a share, in the quarter ended June 26, compared with $486 million, or 29 cents, a year earlier, the San Diego-based company said.

Sales rose 1.3% to $1.36 billion, and the company raised its 2005 profit forecasts.

Shipments of the latest phones increased substantially, Chief Executive Paul Jacobs said in a statement.

Average phone prices surged to $231, compared with an average of $205 a year earlier, handing Qualcomm higher royalties and catching analysts by surprise. The company had been expected to report falling profit and sales on concern that phone makers slowed the adoption of Qualcomm’s newest technology.

“Average selling prices were much higher than anticipated,” said Matthew Hoffman, an analyst at Moors & Cabot Inc. in New York. He rates the shares “buy” and doesn’t own them. “That was the main surprise.”

The company said profit would be 29 cents to 31 cents a share in the current quarter, excluding the investment unit, on sales of $1.43 billion to $1.53 billion. Analysts had forecast 30 cents on revenue of $1.51 billion.

Qualcomm shares, which rose 29 cents to $36.09 in regular trading, gained nearly 4% after hours.